It can be annoying, difficult, and ultimately expensive for a consumer to straighten out errors in a credit card statement, as Jeffrey Strange found out when he purchased a window at Home Depot, Inc., for $346.21. He charged the purchase to his Home Depot credit card, which had been issued by the Monogram Credit Card Bank ("Monogram"). Strange soon discovered that the size of the window had been mislabeled and that he therefore could not use it. He returned it to the Home Depot store from which he had obtained it, and, he thought, received a credit for the return. Wrong he was. When his monthly credit card statement arrived in November 1994, he discovered that his account had not been credited for the return. Following the instructions on the bill, Strange wrote to the address listed requesting that his account be corrected. Neither Home Depot nor Monogram responded to his letter. When his next monthly statement again did not reflect any credit for the returned window, Strange wrote a second letter, again asking that the billing error be corrected. Once again, his efforts were to no avail: neither company responded, and subsequent monthly billing statements continued to reflect the billing error of $346.21.

Strange ultimately filed suit against both Home Depot and Monogram for violations of the Truth in Lending Act (TILA), 15 U.S.C. sec. 1601 et seq. He alleged that both companies were liable for failing promptly to credit the purchase price of the returned window to his account in violation of sec. 1666(c) and (d) (Count I), and that they were also liable for not acknowledging receipt of the billing error notices within 30 days of receiving them, for failing to investigate and resolve the billing error dispute within two complete billing cycles or 90 days, and for continuing to attempt collection of the amount in dispute and to impose finance charges on the disputed balance, all in violation of sec. 1666 (Count II). Each count requested recovery "for each and every violation of the Act." The complaint also requested that the court "[a]ward statutory damages in the amount of twice the finance charge not to exceed $1000 in accordance with 15 U.S.C. sec. 1640(a)(2)" and that it award costs and reasonable attorneys' fees under sec. 1640.

Both Strange and Home Depot moved for summary judgment. The district court denied Strange's motion with respect to Home Depot but granted it with respect to Monogram, which the court found had violated the TILA by failing to send Strange a written explanation of the billing error. The court granted Home Depot's summary judgment motion because it was not a "creditor" under the terms of the statute. It ordered damages for Strange in the amount of $1,000, the statutory maximum under sec. 1640.

Not satisfied, Strange (through another lawyer in the office) filed a petition requesting $21,743.75 in attorneys' fees for his lawyers, Jeffrey Strange & Associates. Monogram opposed the petition, claiming that it was excessive and that the proper award for the credit dispute under the TILA was $100--an amount that made Strange's fee request some two hundred times the amount in controversy. In keeping with this argument, Monogram also filed a Motion for Reconsideration of Statutory Damages Award, requesting that the statutory penalty be reduced to $100. In response to that motion, the court reduced the award for Strange to $54.72, twice the erroneously billed finance charge of $27.36.

The district court rejected Strange's request for the full $21,743.75 in attorneys' fees, explaining its decision as follows:

I granted Mr. Strange summary judgment on his claim against Monogram, but awarded Mr. Strange a judgment of only $54.72. Had he properly researched the issues in this lawsuit when he first filed his complaint, Mr. Strange would have known that this amount would be all he was awarded. Even if there were some question as to whether he was entitled to multiple recoveries for multiple violations, Mr. Strange pled only six violations of the TILA. Thus at most Mr. Strange would only be entitled to $328.32. It was not reasonable for Mr. Strange to incur over $21,000 in attorney's fees to prosecute a claim worth, at most, $328.32. . . . Here I find that it was absurd for Mr. Strange to spend 123 hours to establish a $54 (or even $328) claim.

. . . . The problem with Mr. Strange's fee request, however, is not that his attorney's billing rate of $175/hr is too high, but that the amount of time he spent on this case was excessive. I therefore grant his fee request only for the reduced amount of $3,000. . . .

Strange argues now that the court erred both in reducing his award to $54.72 and in cutting his attorneys' fees so substantially.

District courts have wide latitude in determining attorneys' fee awards, and our review of these decisions is "a highly deferential abuse of discretion standard." Estate of Borst v. O'Brien, 979 F.2d 511, 514 (7th Cir. 1992). Recognizing the problems this poses for him, Strange argues that the court did not use the proper analysis in determining the award, and in that way abused its discretion. It failed, he believes, to follow the method the Supreme Court established in Hensley v. Eckerhart, 461 U.S. 424 (1983), under which the court begins with "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Id. at 433. See also Blanchard v. Bergeron, 489 U.S. 87, 94 (1989). (This figure would normally reflect the twelve factors to which the Court referred in the Hensley opinion, id. at 430 n.3, which originated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).) The Hensley Court went on to say that the district court "should exclude from this initial fee calculation hours that were not 'reasonably ...

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